I am back in Hong Kong, and some things don’t change. Principally the fact that I really do miss sleep. My pathetic – failed – attempts at staying asleep for any meaningful length of time has meant that my intention to reduce coffee intake in 2016 lasted all of five days. The best laid plans and all that.
That aside, my first two days have been a veritable whirlwind of activity, centred on the showrooms of Tsim Tsa Tsui. The good news is that everywhere I have gone so far, the mood has been upbeat: whether speaking directly to retailers or asking suppliers how they feel their customers fared in 2015, the response has been consistently and resoundingly positive. Two decent trading years in a row – with true category growth untainted by inflation – has left the UK toy market in good shape as it enters 2016. There is little talk of significant stock carry over, and while Christmas is said to have come late yet again, come it certainly did. As someone pointed out, the days of massive December cancellations by retailers thankfully seem to be a distant memory: it has been at least three years since we last saw that happen.
The only potential dark cloud on the horizon has been provided by the volatility of the Chinese stock market since the turn of the year. Poor Chinese manufacturing data is believed to have contributed towards the uncertainty: recently released results suggest that manufacturing output has contracted for ten consecutive months up to December. In the short term, people are anticipating a strengthening of the dollar, with the $1.40 line looking increasingly likely to be breached any day. That in itself shouldn’t cause major ructions, but if the trend was to continue and the dollar reaches $1.30 or even $1.20, that would of course be a whole different story. I’m hearing that some suppliers are engaging in forward buying currency as a precaution, but even that can only cover a company for so long, and in the end, toy companies are traders, not bankers.
The showrooms are just starting to get busy, as international visitors arrive in town en masse. For some reason – and do feel free to enlighten me if you have the answer – the British buying contingency seems to act as a sort of advance scouting party before the rest of the world shows up here. I guess there is something they must love about getting straight on a plane the minute we hit New Year. I’ll be working on a round-up of some of the highlights of my showroom visits so far over the weekend, which we’ll put online on Monday.
Last night’s Fence Club football match was a resounding success. Over 240 people headed to the Happy Valley Football Club to witness a UK toy trade team run the Hong Kong X1 closer than they have for years, losing 3-2 to a last-minute goal. Everyone I spoke to today who was there remarked at how good the atmosphere was last night, and I think it’s fair to say that no other country organises an event on this scale, which is testament to the camaraderie and spirit of the British toy community. A huge well done to everyone involved.
There has been remarkably little discussion of the rumours about a potential takeover of the Home Retail Group by Sainsbury’s out here: I’m not sure if that reflects the fact that most people see it as unlikely to happen, or whether it’s just that they don’t want to entertain the possibility that it could go ahead.
There has been plenty of talk about Star Wars: I gather that after the initial burst of collector- driven activity in September, sales went extremely quiet, which made licensees twitchy and retailers consider cancellations. But thankfully a week before the movie was launched, sales went into overdrive, and all was well. Expect that pattern to have an effect on retailer’s stocking plans for future movies. Oh, and those stories that have been doing the rounds about the female character Rey not being added to certain products so as not to spoil the plot….let’s just say that I’m hearing that may not tell the entire tale. If the rumours are true, the huge American retailer that allegedly asked a while back for Rey to be removed from a particular product assortment because they thought it wouldn’t sell must be feeling pretty sheepish at the moment.
More news from Hong Kong – including my showroom highlights – on Monday.